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NewsJessica Fino
9 Jan 2019 10:51am

Skills shortage drives salaries higher

A continuing lack of candidates available in the UK jobs market has driven pay rates higher, according to KPMG and the Recruitment & Employment Confederation (REC)

The latest UK reports on jobs, compiled by IHS Markit, found candidate availability declined once again at the end of 2018, leading to the weakest rate of permanent staff appointments in 20 months.

At same time, demand for staff grew at a stronger rate than seen over the last 21 years, driving pay rates for both permanent and short-term workers in December.

The report found accounting and financial, as well as engineering, were the most in-demand sectors for permanent staff in December, while the slowest increase was registered for executive and professional staff.

Neil Carberry, REC’s chief executive, said, “It’s no surprise that growth in new permanent jobs dropped to its lowest level in almost two years last month, because economic uncertainty is now affecting companies’ hiring plans. But the underlying strength of our labour market is still there – vacancies are high and temporary placements rose in the run-up to Christmas. There are opportunities out there for people who want to change job in 2019.”

Carberry pointed out accounting, engineering, hospitality and healthcare had the biggest shortages.

“Continuing to fill roles like these in the coming months will be critical, so it is vital that the government’s proposed new approach to immigration can fill shortages at all skill levels.

“But businesses can also help,” he said, “by opening up career paths through more inclusive hiring practices and focusing on improved workplace training and links with education.”

James Stewart, vice chair at KPMG, said, “A lot of people don’t want to move jobs right now because there is so much uncertainty around. In addition, the supply of EU citizens entering the UK for work is slowing while every sector continues to take on more staff. This means a near-record number of vacancies are going unfilled and talent gaps in industries like engineering, finance and IT are opening up.”

Stewart added that companies are offering increasingly attractive and creative packages to tempt new talent on board.